Market Reaction: Halliburton's Stock Drops Despite Strong Q2 Earnings

Halliburton Company (NYSE: HAL) saw its stock price decline by 2.72% to $35.45 during the premarket trading session following the release of their latest financial results:

For the second quarter of 2024, Halliburton reported a net income of $709 million, translating to $0.80 per diluted share. This compares favorably to $606 million, or $0.68 per diluted share, reported in the first quarter, and adjusted net income of $679 million, or $0.76 per diluted share, for the same period. Total revenue for the second quarter remained steady at $5.8 billion, with operating income increasing by 5% to $1.0 billion sequentially.

Jeff Miller, Chairman, President, and CEO of Halliburton, expressed confidence in the company's performance, highlighting strong returns and cash flow. He emphasized the quality of their team, strategic clarity, advanced technologies, robust pipeline of opportunities, and competitive business segments as key factors bolstering Halliburton's outlook.

Miller noted, "In our international markets, there is robust demand for Halliburton’s services, marked by high activity levels and strong equipment demand across major basins. Our strategy in North America continues to deliver shareholder value, and we anticipate maintaining strong returns throughout this business cycle."

Operating Segment Highlights:

Completion and Production: Revenue remained flat at $3.4 billion in the second quarter, while operating income increased to $723 million, up 5% from the first quarter. Sales of completion tools in the Eastern Hemisphere and increased stimulation and cementing activities globally drove revenue improvements, offset by declines in U.S. land stimulation and completion tool sales in the Western Hemisphere.

Drilling and Evaluation: Revenue for this segment was $2.4 billion, with operating income flat at $403 million sequentially. Growth in drilling-related services across Europe, North America, and Asia, along with enhanced wireline activities in several regions, countered decreases in global software sales and drilling-related services in Latin America and Africa.

Geographic Performance:

North America: Revenue declined 3% sequentially to $2.5 billion, primarily due to reduced U.S. land pressure pumping services and decreased activity in the Gulf of Mexico across various product lines. However, this was partially offset by increased drilling services in Canada and U.S. land, higher wireline activity, and improved cementing services in the Gulf of Mexico.

International: Revenue grew 3% sequentially to $3.4 billion.

• Latin America: Revenue held steady at $1.1 billion, benefiting from increased activity in Argentina and the Caribbean, boosted pressure pumping services in Mexico, and enhanced drilling-related services in Brazil.

• Europe/Africa: Revenue increased 4% to $757 million, driven by heightened well construction and wireline activities in Norway, along with stronger completion tool sales and stimulation activities in Angola.

• Middle East/Asia: Revenue rose 5% to $1.5 billion, driven by increased well construction in the UAE, enhanced completion tool sales in Saudi Arabia, and improved stimulation and project management activities in Kuwait and Asia.